MARKET SENTIMENT MODERATING ON BANK STOCK PRICES: COMPARATIVE EVIDENCE FROM INDONESIA AND MALAYSIA
Published:
2026-10-27Downloads
Abstract
This study examines the influence of volatility and interest rates on stock prices, with market sentiment as a moderating variable, in banking companies listed on the Indonesia Stock Exchange and Bursa Malaysia during the 2021–2025 period. The research employs a quantitative approach with panel data regression analysis using the Random Effect Model on 25 banking companies with 125 observations. Secondary data were collected from the Indonesia Stock Exchange, Bank Indonesia, Bursa Malaysia, and Bank Negara Malaysia. The results indicate that volatility has a positive and significant effect on stock prices, suggesting that increased market uncertainty drives investors to adjust return expectations, thereby affecting stock prices. Interest rates do not significantly affect stock prices, indicating that banks have the ability to adjust their asset and liability structures to mitigate the impact of monetary policy changes. Market sentiment does not significantly affect stock prices, suggesting that investors in the banking sector prioritize fundamental factors over short-term psychological factors. Furthermore, market sentiment does not moderate the relationships between volatility and stock prices, nor between interest rates and stock prices. Comparative analysis reveals significant differences in the relationships between volatility, interest rates, stock prices, and market sentiment conditions between Indonesia and Malaysia. These findings highlight the dominance of volatility as a key determinant of banking stock prices and the limited role of market sentiment in moderating these relationships.
Keywords:
Stock Price Volatility Interest Rate Market Sentiment Banking SectorReferences
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